Healthcare and Consumer Segments Drive Solid 4Q Results; Needham & Company Reiterates Hold on Nuance Communications (NUAN)
Needham & Company reiterated a Hold rating on Nuance Communications (NASDAQ: NUAN) following the company's 4Q earnings report. Revenue of $513 million and $0.41 EPS were both above consensus of $508 million and $0.35. The Healthcare and Consumer segments drove results, while the Enterprise and Imaging businesses continue to lag.
Analyst Scott Zeller commented, "Nuance reported solid SeptQ results after yesterday's close, with both revenue and EPS coming in above consensus estimates. While topline growth has been stalled by a shift toward recurring revenue (and certain segmentspecific headwinds), we believe the overall business is showing signs of stabilization. Management's initial outlook for FY16 is in line with consensus revenue and may be viewed as better than feared. Continued cost reductions through FY16 should help boost margins above FY15 levels, and FY16 EPS guidance is above consensus. While last night's results and guidance were generally positive, we believe shares are fairly valued at current levels and may likely remain range-bound. Maintain HOLD."
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Shares of Nuance Communications closed at $17.05 yesterday.